The opening day of this week’s sale had everyone confused. After the last day recovery in Fremantle last Thursday, thoughts of a market comeback this week were quickly dashed as all indicators lost up to 20 cents on Tuesday in Melbourne. The first sign of a turn-around was on Wednesday as Melbourne firmed up, posting a 3 cent rise. Sydney and Fremantle recorded reluctant falls, but the sentiment was more positive than earlier in the week. Thursday exploded into action as all three centres shrugged off the negativity of the previous sale and made good gains to the tune of 65 cents for 16.5s in Sydney. We also had evidence of a recovery on Wednesday as sales on Wooltrade started, the first sales on the internet system for 7 weeks. By Thursday afternoon we had 40 bales sold and buyers ringing up trying to buy passed-in lots from not only this sale but from last week’s catalogue as well. How things can change so quickly! One factor not mentioned last week that could have contributed to the big fall was that orders for uniforms in China (be it factory or office workers or even the army) had dried up. Also, a few alarm bells rang when their economic growth had shrunk to a lowly 6% in the March quarter when compared to the 8% growth in the December quarter. What the EU or the USA wouldn’t give for a growth figure half that size! Adding to the shaky confidence aspect for the market would be the bombings in Boston and the massive factory explosion in Texas, certainly a tough week in the States. By the final lot sold on Thursday all indicators in the three centres (bar fine types <17 micron) had added 10 to 25 cents from last week’s levels. Finer indicators posted healthy gains of 40 to 70 cents. Pass in rates fell to just 7% on Thursday with the weekly figure down to 9% - a drop of over 16% from last week’s disaster. This sale was the first since early March in which the EMI had recorded any upward movement, 6 cents to 1005. Wednesday’s modest gain in Melbourne broke the longest run of falls (12 consecutive selling days) that the EMI had experienced since AWEX’s inception in 1995. The fall amounted to 127 cents, 11.4%. Following last sale’s collapse, the withdrawn figure blew out to 11%, the largest for over 4 years, sending a clear message that there is grower resistance to the EMI dropping under 1000 cents.

Skirtings started the sale on a sour note with initial losses totaling up to 30 cents. The mood changed rapidly on Thursday to see all types and VM levels across all microns adding 20 cents to their overnight values to finish the sale just off their opening quotes. Cardings mirrored the movements of skirtings after opening the sale with 5 to 15 cent falls only to recover these losses in full on the final day to have the MCI unchanged at 715 cents. Crossbreds were the quietest sector of the week posting subtle rises of up to 5 cents.

What a difference day makes. From doom and gloom last week, to almost dare we say, panic buying by Thursday. A sudden drop in the exchange rate to under 103 cents this morning from over 105 cents a week ago looks to have helped write some new business. The forecast for national offerings looks to be tapering off as the weekly catalogue will only average 45,000 bales over the next 3 weeks. These factors will be taken into consideration by mills as we move into the quieter recevial period of Winter for some brokers. On the other hand nothing has changed for the Chinese regarding the economic problems in Europe and the USA, tension on the Korean peninsular or their own economic slowdown. Next week we will offer 960 bales on Wednesday with at the very least a solid market for all concerned.